Accenture-HP-SAP Collaboration Should Drive HANA Adoption Higher

German enterprise software developer SAP AG (NYSE:SAP) recently struck a partnership with Accenture and Hewlett Packard to accelerate the deployment of its in-memory database platform HANA on a Software-as-a-Service (SaaS) model. [1] The partnership includes Accenture as the primary services provider and HP as the primary infrastructure provider while its subsidiary SAP America provides mission-critical product support for the deployment of HANA on a subscription model.

We believe the collaboration is a strong attempt from SAP to push forward with its HANA platform as the de-facto industry standard for in-memory application deployments. SAP caught significant attention in the IT industry by marketing the HANA platform as the world’s first in-memory computing database. From a revenue perspective, HANA has seen good traction, with fiscal 2013 revenues reaching approximately €664 million (~$882 million). In this article, we take a look at SAP’s strategy with HANA and what the partnership with Accenture and HP provides for SAP. We have a $96 Trefis price estimate for SAP against its current market price of $75.

SAP HANA, short for High Performance Analytic Appliance, is the company’s flagship in-memory database product launched in November 2010. As the company states it, “SAP HANA converges database and application platform capabilitiesin-memory to transform transactions, analytics, text analysis, predictive and spatial processing so businesses can operate in real-time.” [2] Clearly, the company’s strategy from the above description of its HANA platform is to promote the bundling of their application suite offerings with the real-time, in-memory database HANA platform.

What differentiates an in-memory database management system from the traditional relational database management system (RDBMS) is the nature of input/output operations surrounding data access. In traditional RDBMS, data is uploaded and downloaded into and out of system memory from the data set stored on hard drives in the storage system supporting the server. In contrast, the in-memory platform loads the entire data set into in the system memory, which is radically expanded. This eliminates the read-write time of the hard disks, allowing real time analytics at much higher speeds.

We believe the main objective behind SAP bundling its applications with the HANA platform is to boost the adoption of its HANA platform. Being a market leader in most enterprise software verticals such as ERP, SCM and BI/BW, SAP has the flexibility to bundle these application packages with its in-memory platform for agile provisioning of resources. Faster processing rates and lower latency should benefit businesses with reduced operational costs. In addition to the on-premise deployments of its application suites, SAP has also rolled out an SaaS model of deployments for both for its application offerings such as Business Suite and Business Warehouse, as well as the HANA in-memory database module. This should resonate well with customers inclined towards an SaaS deployment rather than the traditional on-premise model.

Accenture-HP-SAP Partnership A Win-Win For All

The collaboration between Accenture, HP and SAP is a win-win scenario, both for the participants and for customers unfamiliar with this new technology. According to the agreement, Accenture is the primary contact and manager for customer implementations of the SAP HANA system. The partnership with Accenture is crucial for SAP, given Accenture’s deep operational expertise in the technology domain. Prior to the partnership on SAP HANA, both Accenture and SAP teamed up to launch a new business solutions group focused on jointly developing and delivering industry-specific solutions based on cloud and other digital technologies. [3]

We believe the collaboration between SAP and Accenture on deploying industry-specific solutions and implementing customized solutions of the HANA module should boost bookings for the HANA platform. Customers opting for the joint industry-specific offering from SAP and Accenture can also choose to deploy this offering on the SaaS HANA platform for greater operational efficiency. The collaboration in product and service offerings should also simplify the process of purchasing SAP solutions and Accenture services for clients.

On the hardware front, these customer-specific solutions are configured on the HP ConvergedSystem 900 infrastructure. HP ConvergedSystems are purpose-built systems, designed to handle enormous workload requirements with speed and efficiency. Excellent integration across server, storage and networking makes these systems easy to deploy and manage. Technologically, the ConvergedSystem 900 is an augmented version of the ConvergedSystem 500, which HP introduced specifically for the deployment of SAP HANA solutions in March 2014. [4]

The new ConvergedSystem 900 is a massively scalable system and is certified by SAP to deliver up to 12 terabytes of data in a single memory pool to power the most mission-critical business applications. This enables clients to manage and analyze extremely large and diverse data sets from a single system to facilitate real-time business decisions. And because of the collaboration, new systems can be delivered for implementation in as little as 30 days. [5] The highly scalable architecture of the ConvergedSystems ensure up to 100 percent uptime, vital for the running of mission-critical application such as ERP, SCM and CRM for business operations. This allows SAP to focus entirely on developing and providing mission-critical product support required for industry-specific solutions jointly with Accenture.

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